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Brexit

U.S., U.K. regulators sign cooperation pact in case of Brexit

The Houses of Parliament stand in London, U.K., on Thursday, March 28, 2019.

Regulators in the U.S. and U.K. on Friday reiterated their agreement to cooperate closely in the event of the U.K.'s withdrawal from the European Union.

Securities and Exchange Commission Chairman Jay Clayton and U.K. Financial Conduct Authority CEO Andrew Bailey signed two updated memorandums of understanding at a meeting in London, where they also discussed the risks of jurisdictional share trading obligations that could impact market fragmentation and investors' costs.

Mr. Bailey said in a statement that FCA has been working with EU partners and globally "to ensure there is minimal disruption. These MOUs will ensure the U.K. can continue to be a key market for funds and fund managers."

Mr. Clayton noted in the same statement that the SEC and the FCA "have a long history of effective cooperation on supervisory and other matters."

The first MOU, updating one originally signed in 2006, covers more firms, including those that conduct derivatives, credit rating and derivatives trade repository businesses, to reflect derivatives reforms enacted after the financial crisis, and the FCA's assumption of responsibility from the European Securities and Markets Authority for overseeing credit rating agencies and trade repositories after Brexit.

A second agreement originally signed in 2013 was required under the U.K. Alternative Investment Fund Managers Directive. It provides a framework for oversight and exchange of information covering rules for alternative investment fund advisers, fund managers, private funds and other entities, and is aimed at ensuring that they can operate on a cross-border basis uninterrupted, "regardless of the outcome of the U.K.'s withdrawal from the EU," the statement said.

Britain was originally scheduled to leave the European Union on Friday, but now faces a deadline of April 12, with no exit plan approved yet.